Debit purchasing of stored value card for use by and/or delivery to others

ABSTRACT

A method of issuing a purchase card is provided. The method includes the steps of presenting a purchaser with the opportunity to buy the purchase card, determining whether the purchaser has sufficient funds to pay for the purchase card, creating a purchase card account for a recipient designated by the purchaser, and issuing the purchase card. The purchase card may also be issued in connection with another credit card, for example as a rebate for purchases on the credit card. The purchase card may also be converted to a credit card.

FIELD OF THE INVENTION

[0001] This invention relates to a system for purchasing or transferringof stored value or debit purchasing cards, which can be pre-arranged tobe given as a gift to a designated recipient.

BACKGROUND OF THE INVENTION

[0002] On many occasions, consumers, other bank customers, credit cardholders, and other persons find it is desirable to arrange for anotherperson, perhaps a relative, to have access to a specified sum of money.For example, a parent might want to arrange for a child to have accessto money when the child is taking a trip or going away to college. Onemay also find it desirable to mail a gift to another person who isgeographically distant. In these and other cases, it is oftenundesirable to give away or send cash. If lost or stolen, cash ispractically unrecoverable. Traveler's checks are also undesirable asthey must be purchased at a bank and are not acceptable for many typesof purchases. Gift certificates are also undesirable because theyrequire the recipient to purchase from the merchant that issued the giftcertificate. These and other drawbacks exist to the aforementionedalternatives.

SUMMARY OF THE INVENTION

[0003] An object of the invention is to overcome these and otherdrawbacks in existing purchase schemes.

[0004] Another object of the invention is to provide a method forissuing a purchase card comprising: presenting a purchaser with theopportunity to buy the purchase card, determining whether the purchaserhas sufficient funds to pay for the purchase card, creating a purchasecard account for a recipient designated by the purchaser; and issuingthe purchase card.

[0005] A further object of the invention is to provide a purchase cardwhere the recipient activates the purchase card.

[0006] A further object of the invention is to provide a purchase cardwhere the purchase card account contains a monetary amount determined bythe purchaser of the purchase card.

[0007] A further object of the invention is to provide a purchase cardwhere money can be added to the balance of an issued purchase cardaccount.

[0008] A further object of the invention is to provide a purchase cardwhere the purchase card is activated when the issuer of the purchasecard is notified that the recipient has received the purchase card.

[0009] A further object of the invention is to provide a purchase cardwhere the issuer of the purchase card notifies the purchaser that therecipient has received the purchase card.

[0010] A further object of the invention is to provide a purchase cardwhere the purchaser may designate with which merchants the purchase cardmay be used.

[0011] A further object of the invention is to provide a purchase cardwhere the purchase card is activated for a predetermined period of time.

[0012] Another object is to provide a method for issuing a purchase cardas a rebate award comprising issuing a credit card to a cardholder, saidcredit card being associated with a sponsor. calculating a rebate amountbased upon cardholder purchases made with said credit card, issuing apurchase card to a cardholder or to a recipient designated by saidcardholder, said purchase card having a purchase value determined bysaid rebate amount.

[0013] A further object of the invention is to provide a purchase cardwhere the recipient of the purchase card activates the card.

[0014] A further object of the invention is to provide a purchase cardwhere the recipient activates the purchase card by notifying the issuerthat the recipient has received the purchase card.

[0015] A further object of the invention is to provide a purchase cardwhere the purchase card is activated for a predetermined period of time.

[0016] A further object of the invention is to provide a purchase cardwhere the rebate is calculated based on all purchases made with thecredit card.

[0017] A further object of the invention is to provide a purchase cardwhere the rebate is calculated based on purchase from the sponsor madewith the credit card.

[0018] A further object of the invention is to provide a purchase cardwhere the sponsor notifies the issuer of the amount of rebate due acredit card holder, and the issuer creates a purchase card in thatamount.

[0019] A further object of the invention is to provide a purchase cardwhere the rebate is based on the monetary value of the purchases.

[0020] Another object of the present invention is to provide a methodfor converting a purchase card into a credit card comprising: creating apurchase card account for a recipient designated by the purchaser;issuing the purchase card; receiving a request from the recipient toconvert the purchase card into a credit card; determining whether therecipient meets predetermined credit criteria to convert the purchasecard into a credit card; creating a credit card account; and convertingthe purchase card into a credit card.

[0021] A further object of the invention is to provide a purchase cardwhere the balance of the purchase card account is transferred to thecredit card account.

[0022] A further object of the invention is to provide a purchase cardwhere the credit cards is immediately activated upon being convertedfrom a purchase card.

[0023] Other objects and advantages exist for the present invention.

BRIEF DESCRIPTION OF THE DRAWINGS

[0024]FIG. 1 shows a flow diagram for a portion of the purchase cardsystem.

[0025]FIG. 2 shows a flow diagram for another portion of the purchasecard system.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

[0026] One embodiment of the purchase card system is shown in FIG. 1. Inthis embodiment the purchase card process begins with an offer topurchase a gift card at step 100. The offer may be in any suitable formthat would notify prospective purchasers 105 of the availability of thepurchase card. For example, a written solicitation may be mailed orotherwise distributed to potential purchasers 105. The offer may also bein the form of oral notification, for example, a telephone call toprospective purchasers 105. Alternatively, the offer may be publishedover a computer network, for example, on an Internet Web site. Otherforms of offering the sale of a purchase card are also possible. In oneembodiment of the invention, offers are made to prospective purchaserswho already have a financial relationship with the offeror. Otherpotential purchasers may also be offered the opportunity to obtain apurchase card.

[0027] The offer may be accepted by a purchaser 105 by notifying acustomer service center 110. The acceptance may be in any formacceptable to the customer service center 110. For example, thepurchaser may mail, fax, or otherwise transmit a written acceptance,telephone an acceptance, or electronically transmit, for example, viaWeb Site, an acceptance by computer or other suitable device. At step120, the customer service center 110 receives pertinent information toidentify the purchaser 105 and the purchaser's desired spending limitfor the purchase card. For example, the customer service center mayidentify the purchaser 105 by name, address, credit card account number,social security number, other unique identifiers or a combination ofidentifiers.

[0028] At step 130, the customer service center 120 is checked to verifythat the caller or purchaser was included in the solicitations for thisprogram. If the caller or purchaser was not originally solicited,customer service 120 determines whether to extend an offer in step 135.

[0029] If the caller or purchaser was solicited 130, certain purchaser105 information may be accessed at 140. If, for example, the purchaserwishes to pay for the purchase card with a credit card, the purchaser'scredit card account information may be accessed. For example, thepurchaser's available credit limit may be accessed at 145 to verify thatsufficient credit is available to cover the spending amount of thepurchase card. If the available credit is insufficient, the purchaser105 may be so informed at 150. The purchaser 105 may be given theopportunity to modify the purchase card spending amount, at 155, inorder to ensure that the purchase amount does not exceed the availablecredit.

[0030] The process may terminate at 160 if, for example, the purchaser105 does not wish to modify the purchase amount.

[0031] After it has been determined that the purchaser's availablecredit is sufficient, a transaction may be posted to the purchaser'scredit card for the amount of the purchase at 170. In another embodimentof the present invention, a purchaser may use a check, cash, or otherfinancial methods to obtain a purchase card. Regardless of thepurchasing method, the issuer of the purchase card must determinewhether the purchaser has sufficient funds to purchase the card.

[0032] When the purchase card is paid for by credit or bank account, thepurchaser's account balance is updated at 175 to reflect the purchase.The account balance information, as well as information identifying thepurchaser 105 and the recipient, may be stored in a retrievable andaccessible fashion. For example, the information may be stored incomputer database 180. After the purchaser 105 has paid (or authorizedpayment) for the purchase card, and it is posted to a credit cardaccount, the acceptance process is complete and the acceptance processterminates at 160.

[0033] An account for the purchase card is created at 190. This may beperformed by a third party processor that establishes and managespurchase card accounts. for example, at 200. Creation of the purchasecard account may comprise various actions, such as, recording therecipients 215 name, address and phone number, imprinting a card with anaccount number, a recipient name and an expiration date, encoding thecard to record the purchase value stored thereon, and other actions,such as, for example, preparing account fulfillment documents (e.g. cardcarrier activation, etc.).

[0034] When the purchase card account is complete, the card isdelivered. In one embodiment of the invention, card may be affiliatedwith a particular network, such a credit network, or debit network. Forexample, a card may be affiliated with the VISA® network. The deliverymay be to the purchaser 105 or to the recipient 215, as shown at 210.The place of delivery may be arranged during the initial purchase of thecard or other suitable time before delivery.

[0035] Information regarding an account is sent to account file 220,where an account can be monitored. In one embodiment, account file 220allows monitoring of the current balance of an account, any activity inthe account, including debits and credits, transaction updates, and thelike. Other information about an account, such as purchase disputeresolutions, the history provided by the customer, and account status,may also be monitored.

[0036] Before the purchase card can be used to make purchases, it mustbe activated as shown in FIG. 2 at 230. Activation may be accomplishedin any suitable manner. For example, the recipient 215 of the card mayplace a telephone call to an activation center 240. Activation center240 may act as a telemarketing vendor by verifying information about therecipient (i.e. name, address, telephone number, etc.) before thepurchase card is activated. The activation center 240 may then transmitthe data about the recipient to Data Service 200 to activate thepurchase card for use. Activation center 240 may also modify informationabout a recipient, such as, for example, a change of address. Otherforms of activation, such as by computer network may also be used.

[0037] During activation certain verifications may be made at 250 toensure that the intended recipient 215 is the person attempting toactivate the purchase card. These security checks 250 may entailquestions about personal information (e.g., name, address, telephonenumber, etc.) or may utilize other well known methods of authenticatingthe recipient 215. If the person attempting to activate the purchasecard does not pass the security check 250, the purchase card will bedenied activation at 255 and the activation process may terminate at260. If the person attempting to activate the purchase card passes thesecurity check 250, they may be prompted at 252 for more information.The information may be used for subsequent security checks, should theybe required, or to verify or complete the purchase card accountinformation.

[0038] After activation the purchase card is ready for use. In someembodiments of the invention the activation process will end at thispoint. The recipient 215 may now use the purchase card to make purchaseswhere ever, for example, VISA® cards are accepted. Each time a purchaseis made using the card, the amount of the purchase will be debited fromthe card's available balance. The purchase card will continue to operateas long as a positive balance remains on the card. Some embodiments ofthe purchase card may have the capacity to have additional purchasevalue added to them after they have been activated.

[0039] If the recipient of a purchase card is someone other than thepurchaser, the issuer of the card may notify the purchaser regardingvarious aspects of the card. For example, in one embodiment of theinvention, the issuer could notify the purchaser that the purchase cardhas been received and activated by the intended recipient. An issuer mayalso notify a purchaser where the purchase card is being used, or whatproducts are being purchased with the purchase card.

[0040] Some embodiments of the purchase card will include an expirationdate. After the expiration date has passed the purchase card will bede-activated and cease to operate. In another embodiment of the presentinvention, a recipient or a purchaser of a purchase card may add to thebalance of the purchase card account. This may take place in a mannersubstantially similar to the original purchasing of the purchase card.For example, a recipient of a purchase card may request that an amountbe posted to the recipient's credit card and that the same amount thenbe credited to the recipient's purchase card account. Other methods ofadding to the balance of a purchase card account may also be used.

[0041] Another embodiment of the invention allows the recipient 215 toconvert the purchase card into a credit card. Conversion may beaccomplished in the following manner. The recipient 215 calls theactivation center 240 to activate the purchase card and the securitycheck 250 may be performed in the usual manner. After passing thesecurity check, the age of the recipient 215 is determined at 270. Ifthe recipient 215 is an adult (e.g., over the age of 18) an offer toconvert the purchase card into a credit card may be extended at 271. Atstep 275 the recipient 215 may decline the offer to convert, in whichcase the process may terminate at 280. If the recipient 215 elects toconvert the purchase card to a credit card the activation center 240 maycapture additional data 285 from recipient 215, in order to complete acredit card application. At step 290 the credit card application data isforwarded to a credit decisioning office 300. The credit decisioningoffice 300 may make inquiries to a credit bureau 305, for example,obtaining a credit report on the recipient 215. At 310 the decision isrendered whether to approve the credit card application. If theapplication for a credit card is declined at 315, the recipient 215 maybe notified at 320. Notification may be in any suitable form, forexample, a letter explaining the declined application may be mailed at320 to the recipient 215. Other forms of notification may also be usedto notify recipient 215 of the declined application.

[0042] Even though the credit card application is declined at 310, thepurchase card is activated for use. At 330, the account settingsallowing a card to be used at merchants are sent to the data service 200and the card will be activated as a purchase card account. Informationpertaining to the purchase card account is stored in a retrievable andaccessible manner. For example, the purchase card account informationmay be stored in a computer 332.

[0043] If the decision at 310 is to accept the application for a creditcard, the recipient 215 may be notified at 340. Again, notification maybe in any suitable form, for example, a letter or other suitablenotification. Regardless of the decision whether to convert the purchasecard into a credit card, the purchase card is activated at the end ofthe activation call. If the purchase card is not already active, it maybe activated at 345. At 350 the purchase card is converted to a creditcard. The credit card will function in a manner usual for such creditinstruments. For example, a credit limit may be assigned, periodicaccount activity statements may be generated and finance charges may beapplied to any outstanding balance. In one embodiment, any remainingbalance from the purchase card account may be transferred and applied tothe credit card account. At 355 an update is sent to a retrievable datastorage system, for example, computer 360. The update 355 sends creditcard application decisions into a database.

[0044] In another embodiment of the purchase card, a financialinstitution (e.g., a bank) issues a credit card to a cardholder. Thecard may be a co-branded card issued in cooperation with a sponsor. Inthis embodiment, the sponsor offers a rebate to the cardholder basedupon the dollar value amount of purchases made with the co-brandedcredit card. The rebate may apply to all purchases made or just topurchases made from the sponsor. The rebate may be calculated in amanner specified by the terms of the cardholder agreement or otherdisclosures to the cardholder. In one embodiment of the invention,disclosure about the rebate is provided to the cardholder in a separateform included with the cardholder agreement. For example, the sponsormay offer a flat percentage rebate for purchases made. In one embodimentof the invention, the card issuer calculates the rebate due thecardholder based on the balance paid.

[0045] In another embodiment, the sponsor notifies the financialinstitution of the amount of rebate to be awarded to the cardholder. Thefinancial institution will then issue a purchase card for the amount ofthe rebate. The purchase card may be used for purchases in the abovedescribed manner, for example, everywhere VISA® is accepted, or thepurchase card may be used for purchases solely with the sponsor or otherdesignated entities.

[0046] Other embodiments and uses of the invention will be apparent tothose skilled in the art from consideration of the specification andpractice of the invention disclosed herein. The specification andexamples should be considered exemplary only. The scope of the inventionis only limited by the claims appended hereto.

What is claimed is:
 1. A method for issuing a purchase card comprising:presenting a purchaser with the opportunity to buy the purchase card;determining whether the purchaser has sufficient funds to pay for thepurchase card; creating a purchase card account for a recipientdesignated by the purchaser; and issuing the purchase card.
 2. Themethod according to claim 1, where the recipient activates the purchasecard.
 3. The method according to claim 1, where the purchase cardaccount contains a monetary amount determined by the purchaser.
 4. Themethod according to claim 1, where money can be added to an issuedpurchase card account.
 5. The method according to claim 2, whereactivating the purchase card comprises notifying the issuer of thepurchase card that the recipient has received the purchase card.
 6. Themethod according to claim 2, where activating the purchase cardcomprises the issuer of the purchase card notifying the purchaser thatthe purchase card has been received by the recipient.
 7. The methodaccording to claim 1, where the purchaser may designate merchants wherethe purchase card may be used.
 8. The method according to claim 2, wherethe purchase card is active for a predetermined period of time.
 9. Amethod for issuing a purchase card as a rebate award comprising: issuinga credit card to a cardholder, said credit card being associated with asponsor; calculating a rebate amount based upon cardholder purchasesmade with said credit card; creating a purchase card account for arecipient designated by the cardholder, the purchase card having apurchase value determined by said rebate amount; and issuing thepurchase card.
 10. The method according to claim 9, where the recipientactivates the purchase card.
 11. The method according to claim 10, wherethe activation of the purchase card comprises notifying the issuer ofthe purchase card that the recipient has received the purchase card. 12.The method according to claim 9, where activation of the purchase cardcomprises activating the purchase card for a predetermined period oftime.
 13. The method according to claim 9, where the rebate iscalculated based on all purchases made with the credit card.
 14. Themethod according to claim 9, where the rebate is calculated based onpurchases made with the credit card from the sponsor.
 15. The methodaccording to claim 9, where the rebate is calculated based on themonetary amount of the purchases.
 16. The method according to claim 9,where the sponsor notifies the issuer of the amount of said rebate, andsaid issuer creates said purchase card.
 17. A method of issuing a creditcard comprising: creating a purchase card account for a recipientdesignated by a purchaser; issuing the purchase card; receiving arequest from the recipient to convert the purchase card into a creditcard; determining whether the recipient meets predetermined creditcriteria to convert the purchase card into a credit card; creating acredit card account; and converting the purchase card into a creditcard.
 18. The method according to claim 17, where the balance of thepurchase card account is transferred to the credit card account.
 19. Themethod according to claim 17, where converting the purchase card to acredit card immediately activates the credit card.